Monolithic Power Systems is the IBD Stock Of The Day as the chipmaker sets a new buy point amid market turmoil. MPWR stock has held up better than other semiconductor stocks lately thanks to its exposure to hot markets like data centers and electric vehicles.
On the stock market today, MPWR stock rose 1.2% to close at 497.51.
Monolithic stock is in a cup-with-handle base with a buy point of 541.49, according to IBD MarketSmith charts. It formed the handle after pulling back from a recent high on Aug. 11.
MPWR stock had been in a loose consolidation period since notching its all-time high of 580 on Nov. 22. But the formation of the handle sets a lower buy point, based on IBD trading guidelines. The previous formal buy point was 580.10.
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Earnings Report A Catalyst For Stock
Monolithic Power Systems got a big boost from its beat-and-raise earnings report late on Aug. 1. MPWR stock rocketed 9.4% the day after the report.
The Kirkland, Wash.-based company's adjusted earnings surged 80% to $3.25 a share in the second quarter. Its sales increased 57% to $461 million. Robust sales of power-management chips for enterprise data, storage and computing applications drove the company's second-quarter beat.
For the current quarter, Monolithic forecast revenue of $480 million to $500 million. The midpoint of $490 million was well above Wall Street's target of $458 million. Its sales in the year-earlier period were $323.5 million.
Monolithic Power Systems makes semiconductor-based electronics power control systems.
In the second quarter, the enterprise data segment was its fastest growing business, up 118% year over year to $65.2 million. That segment represented 14.2% of the company's revenue vs. 10.2% in the year-earlier period.
MPWR Stock Is On Five IBD Lists
Monolithic ranks first out of 34 stocks in IBD's fabless semiconductor industry group, according to IBD Stock Checkup. MPWR stock has an IBD Composite Rating of 98 out of 99. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
MPWR stock is on five premium IBD stock lists. It is on the IBD 50 list of top-performing growth stocks. It also is on the IBD Leaderboard, Big Cap 20, Sector Leaders and Long-Term Leaders stock lists.
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